This is one of a string of enterprises Joyce has built using small loans: a second restaurant which she's having rebuilt after a fire burnt it down, a small cinema, a soft drinks distribution business, a mobile catering service which also delivers school meals. She employs 62 people.

It was only seven years ago that she was destitute, having lost all of her possessions during tribal clashes in upcountry Molo.

'Good families'

She had fled to the slum dwellings on the outskirts of Nairobi. Desperate for support, she was introduced to a group of people in a similar state to herself.

Fifty street beggars eventually became the first members of a trust formed in 1999 called Jamii Bora, Swahili for "good family". It was the vision of Ingrid Munro, founder and managing trustee.

Fifty street beggars were the first members of the Jamii Bora microfinance institution

It developed into Kenya's fastest growing microfinance institution – and the only one of its kind.

Like all of its members, now standing at nearly a quarter of a million, Joyce's cash savings had to amount to at least half of what she wanted to borrow.

So she did it step by step. Joyce grew fruit and vegetables while destitute, saved and then borrowed against her profit. Gradually her enterprises expanded into the healthy business it is today.

She doesn't seem at all anxious about the world financial crisis. Joyce believes bad times can always be overcome with good business sense.

"I have been using my brain. I started out with nothing and eventually had enough to find a carpenter who made a few chairs and some tables. That's how my first restaurant came about.

"The electricity would go off so often – I didn't want to lose business so I took another loan and bought a generator," she said.

Engulfed by the smoke from the wood burners in the Babylon Restaurant's kitchen, Joyce placed her hands on her heart and told me forcibly:

"Everyone here knows where I came from. I was very poor. Now they are learning from me. They think if Joyce can have something they can too.So many have joined Jamii Bora because of me."

Community business

A short distance away at the local branch of Jamii Bora, small groups of people are huddled around tables, discussing their business plans.

The manager, Michael Kairingu, knows what it is like to be destitute. He comes from Kenya's biggest slum settlement, Kibera. He is a former community worker.

"We are doing social business," he tells me with a broad grin.

"We are doing social business... we deal with the very poor of the poor."

Michael Kairingu, Jamii Bora manager

"We are very different from a conventional bank and we deal with the very poor of the poor. But they also have to learn and be very disciplined.

"They have to save then borrow then pay back their loans on time."

I asked him about the worldwide financial crisis and its effects on his enterprise.

"Here the demand for commodities will always be high even though the purchasing power is very low. We can cope. We are dealing with honest people who will work hard to pay back their loans."

Jamii Bora has strict regulations on its outlay which comes to a total of $4m, made up of 329,000 small loans. The average amount borrowed is $100.

The operation doesn't just deal in money. It provides business training, counselling for down and outs, health and life insurance. And free encouragement with sensible advice.

Low default rates

Microfinance is not a new phenomenon. The industry claims to have extremely low default rates. In Africa it is registered at two per cent on average.

But how does all of this sound to the city people who deal in billions and who used to dole out loans with less rigid controls than Jammi Bora applies to its customers in the slums?

Aly-Khan Satchu, a Nairobi financial analyst, said the bailed-out banks from the developed world would fall over themselves to have such low default rates on their portfolios.

Paul Mwangi took a four year microfinance loan to buy his car

But he has words of caution.

"The concern I would have here at the moment is that there's a lack of understanding or differentiation between sub-prime where people are very, very nervous, and microfinance.

"Microfinance has been tarnished a little bit.

"Quite a few of the microfinance operations were unable to take deposits to support their lending and therefore they have relied on external sources of borrowing, international banks and so forth.

"And that might be squeezed at the moment – or the cost of that money might have gone up quite considerably given what's happening."

But he gives his support to institutions like Jamii Bora which base themselves on saving programmes with their customers.

"On a risk adjusted basis it's currently the most sensible form of lending I can find in the world today."

"I'm against aid – there is no comeback, no sense of entrepreneurialism. Huge bureaucracies sit atop this continent.

"This sort of microfinance has a new open minded financial architecture. It's a way of pin pointing and helping people uplift themselves."

Fiscal worries

While Kenya is yet to feel the worst effects of the worldwide financial crash, there is no complacency in the markets. Or on the street.

Taking a Nairobi cab ride, like in so many of the world's capitals, normally gives you an insight on confidence levels.

Here, the finacial crisis and its impact on tourism to an expensive destination such as Kenya is one of the biggest worries.

Paul Mwangi, one Nairobi taxi driver, has borrowed nearly $6,000 to buy his car in a four year microfinance loan. It takes $40 a week out of his takings.

"On a risk adjusted basis it's currently the most sensible form of lending I can find in the world today"

Aly-Khan Satchu, Nairobi financial analyst

And as his business declines he finds himself working longer hours, starting work at 5am and he often doesn't stop driving until well past midnight.

"I have to skip some luxuries to make sure I don't default. It's very hard and it’s getting harder," he tells me.

By luxuries Paul means taking time off. His aim is to grow his business, buy more cars and employ other drivers. For now though his plan is not to take any vacations. If his car lies idle there is no business.

Kenya is a country with a population that on the latest government figures stands at 38 million. More than half of its people live in poverty.

The entrepreneurs amongst them may be in a minority and microfinance has yet to make any major impact on the economic growth.

But Kenya along with the continent of Africa is a place where potential and adversity live side by side.

There is no doubt that as you look at the myriad small enterprises alongside the capital's pothole ridden roads – people selling fruit and vegetables, consumer goods of all kinds from phone chargers to electric hair-dryers, there is a resilience that holds strong no matter how tough the economic backdrop.

That resilience, supported by sensible steady borrowing, could well hold firm as the world financial crisis plays out.

Source:Al Jazeera

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